The M2+CD money supply in Japan rose to 1.6% in September, up from 1.3%. In the US, stock markets bounced back, recovering from last week’s declines due to easing trade tensions with China. The Japanese yen is weak due to local political issues and uncertainties with the Bank of Japan. Meanwhile, the US dollar index remains steady above 99.00, fueled by hopes for a resolution in the US-China trade situation.

Currency Market Movements

The GBP/USD currency pair dropped by 0.13% as the US dollar showed signs of recovery. Gold is approaching a key resistance level, maintaining bullish sentiment despite ongoing US-China trade worries. In the cryptocurrency space, Story, Ethena, and Bittensor lead a recovery, although they still face resistance. The Pi Network has bounced back for three days in a row despite a generally bearish trend. It’s important to research thoroughly when choosing Forex brokers for currency trading due to the risks involved. Japan’s M2 money supply data for September 2025, showing growth at 1.6%, supports our outlook on the yen. This ongoing monetary growth, coupled with political uncertainty, suggests the yen will likely weaken. We recommend considering call options on the USD/JPY pair, especially since it’s now trading above 158.

Market Strategies and Analysis

Overall market sentiment has improved since last week’s drop, with the S&P 500 gaining over 2% as global supply chain concerns seem to have been accounted for. The VIX index has fallen below 16 from recent highs. Selling out-of-the-money puts on major indices could be a wise move to collect premiums, indicating a return to a more stable, risk-on atmosphere like earlier this year. The US dollar remains strong, bolstered by last week’s slightly higher Core CPI data at 3.1%, which lowers the chances of near-term Fed rate cuts. This interest rate difference supports the dollar against currencies like the yen, making derivative strategies that benefit from a strong dollar favorable. With the dollar’s strength, gold struggles to move past the $2,250 resistance level. We see opportunities for range-bound strategies, such as selling covered calls on existing gold holdings or setting up iron condors on gold ETFs. This method allows for income generation while gold remains limited by a strong dollar. Create your live VT Markets account and start trading now.

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